Do Stores Have Too Much Tech? What Does and Doesn’t Work

When Aldo added touch-screen tablets to its stores more than a decade ago, allowing customers to scan and request styles from the stockroom themselves, it expected the technology to replace much of the interaction they would have typically had with sales associates.

Instead, it found that the tools were getting more use from the associates themselves.

“This was a common insight,” said Jennifer Maks, Aldo’s SVP of omnichannel. “Many of the features that we built as ‘self-serve options’ for consumers actually ended up serving our associates in a powerful way; for example, by giving associates the ability to request try-ons through their mobile device, they were able to spend more time on the floor with our shoppers instead of running to the back to see if the product was in-stock.”

The company also discovered, particularly as smartphones became more ubiquitous, that shoppers would rather use their own device than stand at a fixed kiosk. Since then, it has used the learnings from its large-screen devices to retrofit its mobile apps — both consumer-facing and internal — with the same capabilities. In May 2018, it rolled out the ability for customers to request try-ons through the Aldo app, a feature that Maks said is now popular.

The Tech Conundrum

Retailers today are facing a challenge when it comes to investing in new technology: If they don’t do enough, they risk falling behind their more innovative peers, but if they go overboard (at the expense of investing in, say, staff training or better products), they could waste money and lose customers.

Several studies have found a disconnect between what customers want and what retailers think they want in this respect.

According to a report by Oracle NetSuite, a cloud computing company, 79% of retail executives believe that integrating artificial intelligence and virtual reality in stores will increase sales. By contrast, only 14% of shoppers said these technologies would have a significant impact on what they buy. And while almost all executives believe AI and VR will increase foot traffic, 48% of shoppers said these technologies would have no impact on whether they visit a store.

Consumers Retail Technology Chart Oracle
CREDIT: Oracle NetSuite

Part of that divide could be a question of how seamlessly these tools are integrated. H&M, for instance, uses its accumulated data to analyze consumer shopping behavior in an effort to reduce excess inventory and cut down on discounting. All of this happens behind-the-scenes, and shoppers only see the end results on shelves.

“At the point that the customer is seeing the technology and is conscious of it, it feels to me like you’ve failed,” said Kevin Flynn, director of retail strategy at ThoughtWorks, a technology consultancy. “Ultimately, customers want shopping experiences that are inspirational and enable them to get the things they want. They want it to be as frictionless as possible. If they’re seeing the technology and they’re conscious of it, it’s probably just getting in the way.”

Some Weaknesses & Wins

This became especially evident last weekend when Target customers were faced with a nationwide cash register outage that lasted two hours on Saturday, and others found themselves unable to use credit cards for 90 minutes on Sunday due to a data-processing issue.

These POS problems may have cost the retailer between $50 and $100 million, according to various analyst estimates, though Target was reportedly able to salvage some sales through its buy-online-pickup-in-store (BOPIS) program, which shoppers could still use to make their purchases.

Consumers Retail Technology Chart ServiceChannel
CREDIT: ServiceChannel

As omnichannel features such as BOPIS and ship-from-store become more popular with consumers, inventory management is one type of technology that will become increasingly essential, said Bob Amster, principal and co-founder of Retail Technology Group.

For instance, Lululemon rolled out a radio frequency identification (RFID) system in 2015, and by the following year it said it had 98% inventory accuracy (compared with about 65% for the average retailer, according to Auburn University’s RFID Lab).

“The return [on RFID] is almost absolute accuracy,” said Amster. “Imagine being able to take an absolutely correct, accurate inventory at the end of every day, in every back room of 200 or 300 shoe stores.” This can enable automatic replenishment when stock gets low on certain items, show online customers what’s available in stores and — like mobile technology — allow associates to spend more time on the floor instead of hunting around the back room.

It All Comes Down to Mobile

While flashy futuristic touches may entice customers to visit a store once, the true test of its effectiveness is whether they continue to use the technology again and again. And for many retailers, that comes down to mobile.

“We have tried several interactive shopping tools over the years — kiosks, interactive product knowledge, customer-facing tablets,” said Brian Seewald, DSW’s SVP of customer experience and operations. “None of them were as successful as we would have liked. We determined that our customer prefers to shop on their own device and that our focus needed to be on the customer mobile experience.”

The retailer’s app has proven to be a valuable complement to its VIP loyalty program, said Seewald. DSW revamped the program last year, and its 26 million members generate 90% of the company’s sales. Customers receive loyalty points for downloading the app and can use it to keep track of rewards and scan barcodes in-store for reviews and availability.

Still, he said, there’s pressure to get ahead of whatever comes next. “Customer expectations evolve so quickly now that all of us must push ourselves to go faster,” said Seewald.

At Aldo, too, Maks said the company’s experiences with less-successful technology have taught it to be more agile as it tests and develops new innovations. “When we contemplate new ideas, we focus less on the format and tool. Instead we ask ourselves, ‘What is the purpose of this application, what do we want to achieve and why would the consumer care?’ This ensures that we set off on the right path, and it serves as a guiding beacon along the way, particularly as we iterate and evolve through testing.”

Below, style maven Iris Apfel shares her opinions about the latest shoe trends:

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